When Do Online Pay Walls Work?

Interesting article here (“Not All Information Wants to Be Free“) by Jack Shafer of Slate. He notes that many people focus on why “pay wall” business models don’t work online, but few people discuss those models that do (i.e., the ones that successfully get customers to pay for access to content behind the wall). Shafer walks through some of the ones that have worked and concludes:

Not all successful paid sites are alike, but they all share at least one of these attributes:

1) They are so amazing as to be irreplaceable.

2) They are beautifully designed and executed and extremely easy to use.

3) They are stupendously authoritative.

Succinctly stated, the pay-per-view sites are damn unique, offering content or a service that consumers are unlikely to find elsewhere. Of course, that’s a pretty small universe of sites, and unless you content is extraordinarily unique and time-sensitive, I have a hard time believing that a pay wall model will work for most sites.

Importantly, however, Shafer notes that the Internet is still young and business models still have a lot of evolving to do. He concludes his piece by comparing where the Net stands today relative to where broadcast television stood when it was still in its infancy:

If the commercial Internet didn’t get going until 1995, then we’re only 13 or 14 years into the Web era. When television was 13 or 14, practically no pay-TV operations existed outside of a relatively few cable television operations. Starting the 1970s and then in the 1980s, paid TV in the form of HBO and other premium stations started to take root. Radio, born in the early 1920s, didn’t arrive in a paid form until just early in this century. Very few online newspapers or magazines are sufficiently useful to demand a paying premium. But for those who hold dear the notion that information on the Web will forever want to be free, it’s early yet. Keep your eyes peeled for publications whose Web sites are sprouting nonbrowser apps, refining their content, experimenting with new reading devices, bulking up their databases, and above all, publications that are listening to the man from Google who this week wrote, “[O]nline journalism is still in its relative infancy. … The experience of consuming news on the web today fails to take full advantage of the power of technology”

Adam Thierer / Adam is a senior research fellow at the Mercatus Center at George Mason University. He previously served as President of the Progress & Freedom Foundation, Director of Telecom. Studies at the Cato Institute, and Fellow in Economic Policy at the Heritage Foundation.